Decided on December 03,1954



- (1.) This C.R.P. arises out of an application filed by the 1st respondent here-in to adjudicate him. as an insolvent on the ground that he was unable to pay his debts which amounted to Rs. 2,799-3-0. In B Schedule attached to the petition, he disclosed that he had only assets of the value of Rs. 8. The creditors the mainly his first wife and daughter who obtained decrees against him. The third creditor shown in A Schedule of creditors is the State of Madras to whom a sum of Rs. 398-7-0 is due by way of court-fee.
(2.) The District Munsif of Viziawada dismissed the application on the ground that it was not a bona fide application but was made with the ulterior motive of evading the maintenance of respondents 1 and 2 and the debt to the Government. On appeal, the District Judge of Masulipatam set aside the order of the District Munsif and adjudicated him an insolvent. The C.R.P. is filed by the wife and the daughter challenging the correctness of the order of the District Judge. The facts disclose that the 1st respondent is unable to pay his debts amounting to more than Rs. 500. He therefore satisfies the requirements of section 10 of the Provincial Insolvency Act. The view taken by the District Munsif that an application might be dismissed on the ground that it is not a bona fide one is opposed to the decision of the Privy Council in Chhatrapat Singh Dugar v. Kharag Sing, (1916) I.L.R. 44 Cal. 535. Sir Lawrence Jenkins in delivering the judgment of the Judicial Committee expressed himself in very clear and forcible terms as follows : "It is to be regretted that the Courts in India allowed themselves to be influenced by this plea instead of being guided to their decision by the provisions of the Act. In clear and distinct terms the Act entitles a debtor to an order of adjudication when its conditions are satisfied. This does not depend on the Court's discretion but is a statutory right ; and a debtor who brings himself properly within the terms of the Act is not to be deprived of that right on so treacherous a ground of decision as an 'abuse of the process of the Court'. This case illustrates the peril of this doctrine in India or what has been treated by the Courts below as such an abuse appears to their Lordships in no- way to merit this censure."
(3.) Lower down in the judgment, it is pointed out that their conclusion was in agreement with the current authority in India where it had been rightly held that the stage at which to visit with its due consequences any misconduct of a debtor is when his application for discharge comes before the Court, and not on the initial proceeding.;

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